How Does an Increase in a Country's Exchange Rate Affect

question 85

Multiple Choice

How does an increase in a country's exchange rate affect its balance of trade?

• A)An increase in the exchange rate raises imports,reduces exports,and reduces the balance of trade.
• B)An increase in the exchange rate reduces imports,raises exports,and reduces the balance of trade.
• C)An increase in the exchange rate reduces imports,raises exports,and increases the balance of trade.
• D)An increase in the exchange rate raises imports,reduces exports,and increases the balance of trade.

---

Definitions:

Sacks of Coffee

Units of measurement used in the coffee industry to quantify large quantities of coffee beans, typically weighing 60 kg each.

Farmer Produces

"Farmer produces" implies the agricultural output generated by farmers, including crops, livestock, and other products, through their farming activities.

Average Variable Cost

Variable cost divided by the level of output.

AVC

Stands for Average Variable Cost, referring to the cost variable inputs per unit of output in the short run.